TIDMJIM
RNS Number : 8352R
Jarvis Securities plc
11 March 2021
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY
THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER
THE EU MARKET ABUSE REGULATION (596/2014). UPON THE PUBLICATION OF
THE ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
11 March 2021
Jarvis Securities plc
("Jarvis" or "the Company" or "the Group")
RESULTS FOR THE YEARED 31 DECEMBER 2020
HIGHLIGHTS
-- 43% increase in profit before tax
-- 8% increase in year on year interest income
-- 69% growth in interim dividend per share (excludes 2019 special dividend)
-- 42% increase in EPS
CHAIRMAN'S STATEMENT
Few would have predicted how 2020 would unfold with Brexit and
the COVID pandemic impacting industries in different ways. For
stockbrokers trade volumes have increased, but it would be an
oversimplification to attribute these excellent financial results
to this alone. At the beginning of 2020 it felt like we were on the
cusp of volumes returning to normal, and clearly they have exceeded
that prediction. Over the past few years the business has continued
to maintain its organic growth and commercial success as the
following statement will disclose.
I expect our trade volumes to continue at higher levels than we
experienced in 2020 and the years leading up to that. I also see no
signs of organic growth slowing as we move into 2021 with a healthy
pipeline of potential new outsourcing contracts. Client numbers and
cash under administration continue to increase, we are seeing
profitable growth in international settlement and our relationship
with Primary Bid.
We undertook a 4:1 share split during the year to facilitate and
encourage more liquidity in Jarvis shares and encourage a wider
shareholder base. The business model remains unaltered - Jarvis
will continue with a strategy of profitable organic growth whilst
improving internal efficiencies. At present, many of our staff are
working from home, which, whilst presenting some challenges also
creates additional opportunities to review the way we operate where
office space can be a restricting factor. I am proud of the fact we
have been able to maintain our high standard of client service to
both our retail and commercial clients in spite of the disruption
caused by COVID. Our IT infrastructure has been constantly
monitored and tailored to cope with the increased trade volumes and
different working practices and our phone lines have remained
open.
Historically the dividend policy has been relatively formulaic
with a fixed proportion of profit after tax being retained within
the business to maintain our level of FCA capital adequacy or
re-investment where required. This retention accumulates and has
then led to the payment of special dividends. We are required to
retain regulatory capital far in excess of the normal working
capital required to run the business, but in the absence of
requirements for investment in the business it is the Directors'
intention that cash will be paid out in dividends when available.
The sale of Treasury shares has also added to the reserves
available to be distributed over the period and this is likely to
continue which should also increase the free float or liquidity of
shares in the market.
As always, I would like to thank Jarvis staff for their
continued hard work.
Andrew Grant
Chairman
Annual General Meeting
The Company will today dispatch to shareholders its Annual
Report and Accounts for the year ended 31 December 2020, together
with a notice convening the Annual General Meeting ("AGM"), to be
held at the Company's offices on Thursday 22(rd) April at 9am. The
Annual Report and Accounts and Notice of AGM will also be available
from
the Company's website, www.jarvissecurities.co.uk .
During the Covid-19 pandemic, the UK Government has introduced
new laws to prevent individuals engaging in non-essential travel
and attending public gatherings of more than six people, save where
essential for work purposes. Having taken legal advice, the Board
has concluded that, in these exceptional circumstances and for as
long as the current restrictions remain in place, shareholders
should not be permitted to attend the Annual General Meeting but
instead will be asked to vote by proxy by appointing the Chairman
of the meeting as their proxy. The Board has arranged for three
persons to be physically present at the Annual General Meeting to
meet the quorum obligations under the Company's articles of
association but other than these individuals, no other shareholders
will be allowed to attend.
Enquiries :
Jarvis Securities plc
Tel: 01892 510515
Andrew Grant
Jolyon Head
WH Ireland Limited
Tel: 0113 394 6619
Katy Mitchell
Darshan Patel
Consolidated income statement for the year ended 31 december
2020
Year to Year to
31/12/20 31/12/19
Notes
GBP GBP
Continuing operations:
Revenue 3 13,341,136 10,521,806
Administrative expenses (6,465,029) (5,708,739)
Lease finance costs (5,993) (8,393)
Profit before income tax 5 6,870,114 4,804,674
Income tax charge 7 (1,310,424) (893,944)
Profit for the period 5,559,691 3,910,730
Attributable to equity holders
of the parent 5,559,691 3,910,730
Earnings per share 8 P P
Basic and diluted 12.71 8.96
Consolidated statement of comprehensive income for the year
Notes Year to Year to
31/12/20 31/12/19
GBP GBP
Profit for the period 5,559,691 3,910,730
------------------------------------------------ ---------- ----------
Total comprehensive income for the period 5,559,691 3,910,730
============================================== ========== ==========
Attributable to equity holders
of the parent 5,559,691 3,910,730
================================================ ========== ==========
Consolidated STATEMENT OF FINANCIAL POSITION at 31 december
2020
31/12/20 31/12/19
Notes
GBP GBP
Assets
Non-current assets
Property, plant and equipment 9 379,814 461,471
Intangible assets 10 102,019 105,428
Goodwill 10 342,872 342,872
824,705 909,771
Current assets
Trade and other receivables 12 6,923,154 3,373,427
Investments held for trading 14 4,183 4,600
Cash and cash equivalents 15 3,794,980 5,290,961
----------------------------------- ------ --- --- ----------- -----------
10,722,317 8,668,988
Total assets 11,547,022 9,578,759
=================================== ====== === === =========== ===========
Equity and liabilities
Capital and reserves
Share capital 16 111,828 111,828
Share premium 1,655,640 1,576,669
Merger reserve 9,900 9,900
Capital redemption reserve 9,845 9,845
Retained earnings 5,672,848 4,949,467
Own shares held in treasury 16 (886,113) (981,136)
Total equity attributable to
the equity holders of the parent 6,573,948 5,676,573
Non-current liabilities
Deferred tax 45,617 38,664
Lease liabilities 7 64,653 148,633
13
110,270 187,297
Current liabilities
Trade and other payables 17 4,176,030 3,184,059
Lease liabilities 13 83,980 81,507
Income tax 17 602,794 449,323
----------------------------------- ------ --- --- ----------- -----------
4,862,804 3,714,889
Total liabilities 4,973,074 3,902,186
Total equity and liabilities 11,547,022 9,578,759
=================================== ====== === === =========== ===========
CoMPANY STATEMENT OF FINANCIAL POSITION at 31 december 2020
31/12/20 31/12/19
Notes
GBP GBP
Assets
Non-current assets
Property, plant and equipment 9 379,814 461,471
Intangible assets 10 102,019 105,428
Goodwill 10 342,872 342,872
Investment in subsidiaries 11 284,239 284,239
1,108,944 1,194,010
Current assets
Trade and other receivables 12 388,288 636,340
Cash and cash equivalents 15 2,222,469 2,181,403
------------------------------- ------ --- --- ----------- -----------
2,610,757 2,817,743
Total assets 3,719,701 4,011,753
=============================== ====== === === =========== ===========
Equity and liabilities
Capital and reserves
Share capital 16 111,828 111,828
Share premium 1,655,640 1,576,669
Capital redemption reserve 9,845 9,845
Retained earnings 1,481,763 1,776,865
Own shares held in treasury 16 (886,113) (981,136)
Total equity attributable to
the equity holders 2,372,963 2,494,071
Non-current liabilities
Deferred tax 46,253 38,664
Lease liabilities 7 64,653 148,633
13
110,906 187,297
Current liabilities
Trade and other payables 17 801,020 891,435
Lease liabilities 13 83,980 81,507
Income tax 17 350,832 357,443
------------------------------- ------ --- --- ----------- -----------
1,235,832 1,330,385
Total liabilities 1,346,738 1,517,682
Total equity and liabilities 3,719,701 4,011,753
=============================== ====== === === =========== ===========
The parent company's profit for the financial year was
GBP4,541,208 (2019: GBP3,946,513).
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Capital Retained Total
Share Share Merger redemption earnings equity
capital premium reserve reserve Own
shares
held in
Treasury
------------------------------------------ --------- ---------- --------- ----------- ------------ ----------- ------------
GBP GBP GBP GBP GBP GBP GBP
At 1 January 2019 111,828 1,576,669 9,900 9,845 5,523,363 (859,587) 6,372,018
Adjustment from the adoption of IFRS 16 - - - - (5,600) - (5,600)
Profit for the financial year - - - - 3,910,730 - 3,910,730
Purchase of own shares held in treasury - - - - - (227,002) (227,002)
Sale of own shares held in treasury
- - - - 23,254 105,453 128,707
Dividends - - - - (4,502,280) - (4,502,280)
At 31 December 2019 111,828 1,576,669 9,900 9,845 4,949,467 (981,136) 5,676,573
------------------------------------------ --------- ---------- --------- ----------- ------------ ----------- ------------
Profit for the financial year - - - - 5,559,691 - 5,559,691
Sale of own shares held in treasury - 78,971 - - - 95,023 173,994
Dividends - - - - (4,836,310) - (4,836,310)
At 31 December 2020 111,828 1,655,640 9,900 9,845 5,672,848 (886,113) 6,573,948
------------------------------------------ --------- ---------- --------- ----------- ------------ ----------- ------------
COMPANY STATEMENT OF CHANGES IN EQUITY
Share Share premium Capital Retained Own shares Total equity
capital redemption earnings held in
reserve treasury
--------------------------- --------- -------------- ------------ ------------- ----------- -------------
GBP GBP GBP GBP GBP GBP
At 1 January 2019 111,828 1,576,669 9,845 2,314,978 (859,587) 3,153,733
Adjustment from the
adoption of IFRS 16 - - - (5,600) - (5,600)
Profit for the financial
year - - - 3,946,513 - 3,946,513
Purchase of own shares - - - - (227,002) (227,002)
held in treasury
Sale of own shares - - - 23,254 105,453 128,707
held in treasury
Dividends - - - (4,502,280) - (4,502,280)
--------------------------- --------- -------------- ------------ ------------- ----------- -------------
At 31 December 2019 111,828 1,576,669 9,845 1,776,865 (981,136) 2,494,071
--------------------------- --------- -------------- ------------ ------------- ----------- -------------
Profit for the financial
year - - - 4,541,208 - 4,541,208
Sale of own shares
held in treasury - 78,971 - - 95,023 173,994
Dividends - - - (4,836,310) (4,836,310)
--------------------------- --------- -------------- ------------ ------------- ----------- -------------
At 31 December 2020 111,828 1,655,640 9,845 1,481,763 (886,113) 2,372,963
--------------------------- --------- -------------- ------------ ------------- ----------- -------------
statement OF cashflows for the year ended 31 december 2020
CONSOLIDATED COMPANY
Year to Year to Year to Year to
31/12/20 31/12/19 31/12/20 31/12/19
Notes
------ ------------- ------------- ------------- -------------
GBP GBP GBP GBP
Cash flow from operating activities
Profit before income tax 6,870,114 4,804,674 5,250,277 4,608,692
Depreciation and amortisation 5 142,908 153,161 142,908 153,161
Lease finance cost 5,993 8,393 5,993 8,393
7,019,015 4,966,228 5,399,178 4,770,246
(Increase) /Decrease in trade and other receivables (3,465,602) 1,663,939 248,051 85,140
(Decrease) /Increase in trade payables 907,847 (308,217) (90,415) 191,348
Cash generated from operations 4,461,260 6,321,950 5,556,814 5,046,734
Income tax (paid)/received (1,150,000) (891,251) (708,090) (661,251)
Net cash from operating activities 3,311,260 5,430,699 4,848,724 4,385,483
Cash flows from investing activities
Purchase of property, plant and equipment (11,837) (31,567) (11,837) (31,567)
Purchase of investments held for trading (1,060,177) (758,021) - -
Proceeds from sale of investments held for trading
Purchase of intangible assets 1,060,594 755,377 - -
(46,005) (72,925) (46,005) (72,925)
Cash flows from financing activities (57,425) (107,136) (57,842) (104,492)
Repurchase of ordinary share capital - (227,002) - (227,002)
Sale of treasury shares 95,023 105,453 95,023 105,453
Profit on sale of treasury shares 78,971 23,254 78,971 23,254
Dividends paid (4,836,310) (4,502,280) (4,836,310) (4,502,280)
Lease finance cost (5,993) (8,393) (5,993) (8,393)
Repayment of finance leases (81,507) (79,107) (81,507) (79,107)
----------------------------------------------------- ------ ------------- ------------- ------------- -------------
Net cash used in financing activities (4,749,816) (4,688,075) (4,749,816) (4,688,075)
Net (decrease)/ increase in cash & cash equivalents (1,495,981) 635,488 41,066 (407,084)
Cash and cash equivalents at the start of the year 5,290,961 4,655,473 2,181,403 2,588,487
------------------------------------------------------------- ------------- ------------- ------------- -------------
Cash and cash equivalents at the end of the year 3,794,980 5,290,961 2,222,469 2,181,403
------------------------------------------------------------- ------------- ------------- ------------- -------------
Cash and cash equivalents:
Balance at bank and in hand 6,320,942 5,374,229 2,222,469 2,181,403
Cash held for settlement of market transactions (2,525,962) (83,268) - -
3,794,980 5,290,961 2,222,469 2,181,403
------------------------------------------------------------- ------------- ------------- ------------- -------------
NOTES FOR THE YEARED 31 DECEMBER 2020
1. Basis of preparation
The company has adopted the requirements of International
Financial Reporting Standards (IFRS) and IFRIC interpretations
endorsed by the European Union (EU) and those parts of the
Companies Act 2006 applicable to companies reporting under IFRS.
The financial statements have been prepared under the historical
cost convention as modified by the revaluation of financial assets
at fair value through profit or loss.
These financial statements have been prepared in accordance with
the accounting policies set out below, which have been consistently
applied to all the years presented.
New standards, not yet effective
There are no standards that are issued but not yet effective
that would be expected to have a material impact on the entity in
the current or future reporting periods and on foreseeable future
transactions.
Significant judgements and estimates
The areas involving a high degree of judgement or complexity, or
areas where the assumptions and estimates are significant to the
consolidated financial statements, are disclosed in Note 20.
Going concern
The group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Strategic Report on pages 2 to 5. The financial
position of the group, its cash flows, liquidity position and
borrowing facilities are described within these financial
statements. In addition, note 26 of the financial statements
includes the group's objectives, policies and processes for
managing its capital; its financial risk management objectives;
details of its financial instruments and hedging activities; and
its exposure to credit risk and liquidity risk.
The group has considerable financial resources, long term
contracts with all its significant suppliers and a diversified
income stream. The group does not have any current borrowing or any
anticipated borrowing requirements. As a consequence, the directors
believe that the group is well placed to manage its business risks
successfully.
The directors have a reasonable expectation that the group has
adequate resources to continue in operational existence for the
foreseeable future. Thus they continue to adopt the going concern
basis of accounting in preparing the annual financial
statements.
2. Accounting policies
(a) IFRS 15 'Revenue from Contracts with Customers'
Commission - the group charges commission on a transaction
basis. Commission rates are fixed according to account type. When a
client instructs us to act as an agent on their behalf (for the
purchase or sale of securities) our commission is recognised as
income on a point in time basis when the instruction is executed in
the market. Our commission is deducted from the cash given to us by
the client in order to settle the transaction on the client's
behalf or from the proceeds of the sale in instance where a client
sells securities.
Management fees - these are charged quarterly or bi-annually
depending on account type. Fees are either fixed or are a
percentage of the assets under administration. Management fees
income is recognised over time as they are charged using a day
count and most recent asset level basis as appropriate.
Interest income - this is accrued on a day count basis up until
deposits mature and the interest income is received. The deposits
pay a fixed rate of interest. In accordance with FCA requirements,
deposits are only placed with banks that have been approved by our
compliance department. Interest income is recognised over time as
the deposits accrue interest on a daily basis.
(b) Basis of consolidation
Subsidiaries are all entities over which the Group has the power
to govern the financial and operating policies generally
accompanying a shareholding of more than half of the voting rights.
The existence and effect of potential voting rights that are
currently exercisable or convertible are considered when assessing
whether the Group controls another entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the
Group. They are deconsolidated from the date on which control
ceases. The group financial statements consolidate the financial
statements of Jarvis Securities plc, Jarvis Investment Management
Limited, JIM Nominees Limited, Galleon Nominees Limited and Dudley
Road Nominees Limited made up to 31 December 2020.
The Group uses the purchase method of accounting for the
acquisition of subsidiaries. The cost of an acquisition is measured
as the fair value of the assets given, equity instruments issued
and liabilities incurred or assumed at the date of exchange.
Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date,
irrespective of the extent of any minority interest. The cost of
acquisition over the fair value of the Group's share of
identifiable net assets acquired is recorded as goodwill. If the
cost of acquisition is less than the fair value of the Group's
share of the net assets of the subsidiary acquired, the difference
is recognised in the income statement.
Intra-group sales and profits are eliminated on consolidation
and all sales and profit figures relate to external transactions
only. No profit and loss account is presented for Jarvis Securities
plc as provided by S408 of the Companies Act 2006.
(c) Property, plant and equipment
All property, plant and equipment is shown at cost less
subsequent depreciation and impairment. Cost includes expenditure
that is directly attributable to the acquisition of the items.
Depreciation is provided on cost in equal annual instalments over
the lives of the assets at the following rates:
Leasehold improvements - 33% on cost, or over the lease period
if less than 3 years
Office equipment - 20% on cost
Land & Buildings - Buildings are depreciated at 2% on cost.
Land is not depreciated.
Right of use asset - Straight line basis over the lease
period
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at each balance sheet date. Gains and
losses on disposals are determined by comparing proceeds with
carrying amount. These are included in the income statement.
Impairment reviews of property, plant and equipment are undertaken
if there are indications that the carrying values may not be
recoverable or that the recoverable amounts may be less than the
asset's carrying value.
(d) Intangible assets
Intangible assets are carried at cost less accumulated
amortisation. If acquired as part of a business combination the
initial cost of the intangible asset is the fair value at the
acquisition date. Amortisation is charged to administrative
expenses within the income statement and provided on cost in equal
annual instalments over the lives of the assets at the following
rates:
Databases - 4% on cost
Customer relationships - 7% on cost
Software developments - 20% on cost
Website - 33% on cost
Impairment reviews of intangible assets are undertaken if there
are indications that the carrying values may not be recoverable or
that the recoverable amounts may be less than the asset's carrying
value.
(e) Goodwill
Goodwill represents the excess of the fair value of the
consideration given over the aggregate fair values of the net
identifiable assets of the acquired trade and assets at the date of
acquisition. Goodwill is tested annually for impairment and carried
at cost less accumulated impairment losses. Any negative goodwill
arising is credited to the income statement in full
immediately.
(f) Deferred income tax
Deferred income tax is provided in full, using the liability
method, on differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated
financial statements. The deferred income tax is not accounted for
if it arises from initial recognition of an asset or liability in a
transaction, other than a business combination, that at the time of
the transaction affects neither accounting or taxable profit or
loss. Deferred income tax is determined using tax rates that have
been enacted or substantially enacted by the balance sheet date and
are expected to apply when the related deferred income tax asset is
realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it
is probable that future taxable profit will be available against
which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising
on investments in subsidiaries except where the timing of the
reversal of the timing difference is controlled by the Group and it
is probable that the temporary differences will not reverse in the
foreseeable future.
(g) Segmental reporting
A business segment is a group of assets and operations engaged
in providing products or services that are subject to risks and
returns that are different from those of other business segments.
The directors regard the operations of the Group as a single
segment.
(h) Pensions
The group operates a defined contribution pension scheme.
Contributions payable for the year are charged to the income
statement.
(i) Trading balances
Trading balances incurred in the course of executing client
transactions are measured at initial recognition at fair value. In
accordance with market practice, certain balances with clients,
Stock Exchange member firms and other counterparties are included
as trade receivables and payables. The net balance is disclosed
where there is a legal right of set off.
(j) Leases
The following was applicable in 2019. Costs in respect of
operating leases are charged on a straight line basis over the
lease term in arriving at the profit before income tax. Where the
company has entered into finance leases, the obligations to the
lessor are shown as part of borrowings and the rights in the
corresponding assets are treated in the same way as owned fixed
assets. Leases are regarded as finance leases where their terms
transfer to the lessee substantially all the benefits and burdens
of ownership other than right to legal title.
(k) Investments
Investments held for trading
Under IFRS investments held for trading are recognised as
financial assets measured at fair value through profit and
loss.
Investments in subsidiaries
Investments in subsidiaries are stated at cost less provision
for any impairment in value.
(l) Foreign exchange
The group offers settlement of trades in sterling as well as
various foreign currencies. The group does not hold any assets or
liabilities other than in sterling and converts client currency on
matching terms to settlement of trades realising any currency gain
or loss immediately in the income statement. Consequently the group
has no foreign exchange risk.
(m) Share capital
Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction from proceeds,
net of income tax. Where the company purchases its equity share
capital (treasury shares), the consideration paid, including any
directly attributable incremental costs (net of income tax), is
deducted from equity attributable to the company's equity holders
until the shares are cancelled, reissued or disposed of. Where such
shares are subsequently sold or reissued, any consideration
received, net of any directly incremental transaction costs and the
related income tax effects, is included in equity attributable to
the company's equity holders.
(n) Cash and cash equivalents
Cash and cash equivalents comprise:
Balance at bank and in hand - cash in hand and demand deposits,
together with other short-term, highly liquid investments that are
readily convertible into known amounts of cash and which are
subject to an insignificant risk of changes in value.
Cash held for settlement of market transactions - this balance
is cash generated through settlement activity, and can either be a
surplus or a deficit. A surplus arises when settlement liabilities
exceed settlement receivables. This surplus is temporary and is
accounted for separately from the balance at bank and in hand as it
is short term and will be required to meet settlement liabilities
as they fall due. A deficit arises when settlement receivables
exceed settlement liabilities. In this instance Jarvis will place
its own funds in the client account to ensure CASS obligations are
met. This deficit is also temporary and will reverse once
settlement receivables are settled.
(o) Current income tax
Current income tax assets and/or liabilities comprise those
obligations to, or claims from, fiscal authorities relating to the
current or prior reporting periods, that are unpaid at the balance
sheet date. They are calculated according to the tax rates and tax
laws applicable to the fiscal periods to which they relate based on
the taxable profit for the year.
(p) Dividend distribution
Dividend distribution to the company's shareholders is
recognised as a liability in the group's financial statements in
the period in which interim dividends are notified to shareholders
and final dividends are approved by the company's shareholders.
(q) IFRS 9 'Financial Instruments'
The group currently calculates a "bad debt" provision on
customer balances based on 25% of overdrawn client accounts which
are one month past due date and are not specifically provided for.
Under IFRS 9 this assessment is required to be calculated based on
a forward - looking expected credit loss ('ECL') model, for which a
simplified approach will be applied. The method uses historic
customer data, alongside future economic conditions to calculate
expected loss on receivables
(r) IFRS 16 'Leases'
The lease liability is measured at the present value of the
lease payments that are not paid at the commencement date,
discounted using the interest rate implied in the lease or, if that
rate cannot be readily determined, the Group's incremental
borrowing rate.
The Group has applied judgement to determine the lease term for
contracts with options to renew or exit early.
The carrying amount of right-of-use assets recognised was
GBP404,863 at the lease start date of 27 September 2017. The
retained earnings include a GBP5,600 transitional adjustment in
respect of the modified retrospective approach.
A finance charge of 3% APR is used to calculate the finance cost
of the lease.
3. Group revenue
The revenue of the group during the year was wholly in the
United Kingdom and the revenue of the group for the year derives
from the same class of business as noted in the Strategic
Report.
2020 2019
----------- -----------
GBP GBP
Gross interest earned from treasury deposits, cash
at bank and overdrawn client accounts 4,580,067 4,232,976
Commissions 5,279,932 3,320,160
Fees 3,481,138 2,968,670
13,341,136 10,521,806
=========== ===========
4. Segmental information
All of the reported revenue and operational results for the
period derive from the group's external customers and continuing
financial services operations. All non-current assets are held
within the United Kingdom.
The group is not reliant on any one customer and no customer
accounts for more than 10% of the group's external revenues.
As noted in 2 (g) the directors regard the operations of the
group as a single reporting segment on the basis there is only a
single organisational unit that is reported to key management
personnel for the purpose of performance assessment and future
resource allocation.
5. Profit before income tax 2020 2019
-------- --------
Profit before income tax is stated after charging/(crediting): GBP GBP
Directors' emoluments 723,545 671,690
Depreciation - right of use asset 80,973 80,973
Depreciation - owned assets 12,521 11,228
Amortisation (included within administrative expenses
in the consolidated income statement) 49,414 60,960
Operating lease rentals - hire of machinery 8,852 8,842
Impairment of receivable charge 30,305 23,398
Bank transaction fees 91,462 68,734
======== ========
Details of directors' annual remuneration as at 31 December 2020
are set out below:
2020 2019
---------- ----------
GBP GBP
Short-term employee benefits 654,362 589,642
Post-employment benefits 60,663 73,740
Benefits in kind 8,520 8,307
---------- ----------
723,545 671,690
========== ==========
Details of the highest paid director are as follows:
Aggregate emoluments 315,700 347,110
Company contributions to personal pension scheme - -
Benefits in kind 7,788 7,375
---------- ----------
323,488 354,485
========== ==========
Emoluments Pension Total
& Benefits
in kind
------------------- ---------- ----------
Directors GBP GBP GBP
Andrew J Grant 323,488 - 323,488
Nick J Crabb (resigned
6 July 2020) 83,015 24,109 107,124
Jolyon C Head 106,231 36,554 142,785
Graeme McAusland 26,000 - 26,000
------------------- ---------- ----------
TOTAL 538,734 60,663 599,397
=================== ========== ==========
During the year benefits accrued for two directors (2019: two directors)
under a money purchase pension scheme. Nick Crabb received a payment in
lieu of notice of GBP124,148 which is excluded in his emoluments for the
current year.
Staff Costs
The average number of persons employed by the group, including directors,
during the year was as follows:
2020 2019
---------- ----------
Management and administration 61 57
========== ==========
The aggregate payroll costs of these persons were GBP GBP
as follows:
Wages, salaries & social security 2,653,470 2,393,437
Pension contributions including salary sacrifice 93,766 102,923
2,747,236 2,496,360
========== ==========
Key personnel
The directors disclosed above are considered to be the key
management personnel of the group. The total amount of employers
NIC paid on behalf of key personal was GBP85,159 (2019:
76,621).
6. Auditors' remuneration
During the year the company obtained the following services from the company's
auditors as detailed below:
2020 2019
---------- ---------
GBP GBP
Fees payable to the company's auditors for the audit
of the company's annual financial statements 25,000 24,150
Fees payable to the company's auditors and its associates
for other services:
The audit of the company's subsidiaries, pursuant to
legislation 9,000 9,000
---------- ---------
Total audit fees 34,000 33,150
Taxation Compliance 5,000 4,800
39,000 37,950
========== =========
The audit costs of the subsidiaries were invoiced to and met by
Jarvis Securities plc.
7. Income and deferred tax charges - group 2020 2019
---------- --------
GBP GBP
Based on the adjusted results for the year:
UK corporation tax 1,303,937 902,524
Adjustments in respect of prior years (465) (9,793)
Total current income tax 1,303,472 892,731
Deferred income tax:
Origination and reversal of timing differences 3,039 9,560
Adjustment in respect of prior years (569) (4,923)
Adjustment in respect of change in deferred tax rates 4,482 (3,424)
---------- --------
Total deferred tax charge 6,952 1,213
---------- --------
1,310,424 893,944
========== ========
The income tax assessed for the year is more than the standard rate of corporation
tax in the UK (19%). The differences are explained below:
Profit before income tax 6,870,114 4,804,674
============ ==========
Profit before income tax multiplied by the standard
rate of corporation tax in the UK of
19% (2019 - 19%) 1,305,322 912,889
Effects of:
Expenses not deductible for tax purposes 1,486 -
IFRS 16 transitional adjustment (122) -
Adjustments to tax charge in respect of previous years (1,034) (14,716)
Ineligible depreciation 290 320
Adjust in respect of change in deferred tax rate 4,482 (3,424)
Deferred tax timing differences - (1,125)
Current income tax charge for the years 1,310,424 893,944
============ ==========
Movement in (assets) / provision - group:
Provision at start of year 38,664 37,451
Deferred income tax charged in the year 6,953 1,213
Provision at end of year 45,617 38,664
======= =======
Movement in (assets) / provision - company:
Provision at start of year 38,664 37,451
Deferred income tax charged in the year 7,589 1,213
Provision at end of year 46,523 38,664
======= =======
8. Earnings per share 2020 2019
----------- -----------
GBP GBP
Earnings:
Earnings for the purposes of basic and diluted
earnings per share
(profit for the period attributable to the
equity holders of the parent) 5,559,691 3,910,730
=========== ===========
Number of shares:
Weighted average number of ordinary shares for the
purposes of basic earnings per share 43,739,085 43,675,884
43,739,085 43,675,884
=========== ===========
On 29 October 2020 there was a capital reorganisation whereby
each of the company's issued and unissued ordinary shares of
GBP0.01 each were subdivided into 4 ordinary shares of GBP0.0025
each. The 2019 figures have been adjusted to reflect this
subdivision. Shares held in treasury are deducted for the purpose
of calculating earnings per share.
9. Property, plant & equipment
- group & company Right of Leasehold Office Total
use assets & Property Equipment
- Leasehold
-------------- ------------- ------------ --------
Cost: GBP GBP GBP
At 1 January 2019 - 222,450 264,716 487,166
Adjustments from
the adoption of
IFRS 16 303,648 - - 303,648
Additions - - 31,567 31,567
Disposals - - - -
-------------- ------------- ------------ --------
At 31 December
2019 303,648 222,450 296,283 822,381
Additions - - 11,837 11,837
Disposals - - - -
-------------- ------------- ------------ --------
At 31 December
2020 303,648 222,450 308,120 834,218
-------------- ------------- ------------ --------
Depreciation:
At 1 January 2019 - 13,156 255,553 268,709
Charge for the
year 80,973 1,949 9,279 92,201
On Disposal - - - -
-------------- ------------- ------------ --------
At 31 December
2019 80,973 15,105 264,832 360,910
Charge for the
year 80,973 1,949 10,572 93,494
On Disposal - - - -
-------------- ------------- ------------ --------
At 31 December
2020 161,946 17,054 275,404 454,404
-------------- ------------- ------------ --------
Net Book Value:
At 31 December
2020 141,702 205,396 32,716 379,814
============== ============= ============ ========
At 31 December
2019 222,675 207,345 31,451 461,471
============== ============= ============ ========
The net book value of non-depreciable land is GBP125,000 (2019:
GBP125,000).
10. Intangible assets & goodwill - group &
company Intangible assets
---------------------------------------------------- --------
Customer Databases Software Website Total
Goodwill Relationships Development
------------------ --------------- ---------- ------------- -------- --------
GBP GBP GBP GBP GBP GBP
Cost:
At 1 January 2019 342,872 177,981 25,000 226,361 261,713 691,055
Additions - - - 72,925 - 72,925
At 31 December 2019 342,872 177,981 25,000 299,286 261,713 763,980
Additions - - - 46,005 - 46,005
At 31 December 2020 342,872 177,981 25,000 345,291 261,713 809,985
------------------ --------------- ---------- ------------- -------- --------
Amortisation:
At 1 January 2019 - 175,181 15,719 219,129 187,563 597,592
Charge for the year - 2,800 1,000 19,470 37,690 60,960
At 31 December 2019 - 177,981 16,719 238,599 225,253 658,552
Charge for the year - - 1,000 20,289 28,125 49,414
At 31 December 2020 - 177,981 17,719 258,888 253,378 707,966
------------------ --------------- ---------- ------------- -------- --------
Net Book Value:
At 31 December 2020 342,872 - 7,281 86,403 8,335 102,019
================== =============== ========== ============= ======== ========
At 31 December 2019 342,872 - 8,281 60,687 36,460 105,428
================== =============== ========== ============= ======== ========
Goodwill represents the difference between the consideration
paid and the fair value of assets acquired on the acquisition of a
business in 2003. In accordance with the transitional provisions in
IFRS 1 the group elected not to apply IFRS 3 retrospectively to
past business combinations. Therefore the goodwill balance
represents an acquired customer base, that continues to trade with
the group to this day and, more fundamentally, systems, processes
and a registration that dramatically reduced the group's dealing
costs. These systems and the registration contributed significantly
to turning the group into the low cost effective provider of
execution only stockbroking solutions that it is today. The key
assumptions used by the directors in their annual impairment review
are that the company can benefit indefinitely from the reduced
dealing costs and the company's current operational capacity
remains unchanged. The recoverable amount of the goodwill has been
assessed using the value in use method and there is significant
headroom based on this calculation. There are no reasonable changes
in assumptions that would cause the cash generating unit value to
fall below its carrying amount.
11. Investments in subsidiaries Company
2020 2019
------------ --------
Unlisted Investments: GBP GBP
Cost:
At 1 January 284,239 284,239
As at 31 December 284,239 284,239
============ ========
Shareholding Holding Business
Jarvis Investment Management Limited 100% 25,000,000 1p Ordinary shares Financial administration
Dudley Road Nominees Limited* 100% 2 GBP1 Ordinary shares Dormant nominee company
JIM Nominees Limited* 100% 1 GBP1 Ordinary shares Dormant nominee company
Galleon Nominees Limited* 100% 2 GBP1 Ordinary shares Dormant nominee company
All subsidiaries are located in the United Kingdom and their
registered office is 78 Mount Ephraim, Tunbridge Wells, Kent, TN4
8BS.
* indirectly held
12. Trade and other receivables Group Company
Amounts falling due within one year: 2020 2019 2020 2019
---------- ---------- -------- --------
GBP GBP GBP GBP
Trade receivables 588,989 549,872 24,000 9,411
Settlement receivables 5,654,665 2,077,733 - -
Other receivables 352,864 637,814 343,125 624,550
Prepayments and accrued income 326,636 108,009 14,984 2,010
Other taxes and social security - - 6,179 369
6,923,154 3,373,427 388,288 636,340
========== ========== ======== ========
Settlement receivables are short term receivable amounts arising
as a result of the settlement of trades in an agency capacity. The
balances due are covered by stock collateral and bonds. An analysis
of trade and settlement receivables past due is given in note 26.
There are no amounts past due included within other receivables or
prepayments and accrued income.
13. Leases
Lease liabilities are secured by the related underlying
assets.
2020
Amounts recognised in the statement
of cash flows:
GBP
Repayment of capital element of leases 81,507
81,507
The undiscounted maturity analysis of lease liabilities as at 31
December 2020 is as follows:
< 1 year (GBP) 1-2 years (GBP) 2-3 years (GBP)
Lease payment 87,500 65,625 -
--------------- ---------------- ----------------
Finance charge 3,520 972 -
--------------- ---------------- ----------------
Net present value 83,980 64,653 -
--------------- ---------------- ----------------
The undiscounted maturity analysis of lease liabilities as at 31
December 2019 is as follows:
< 1 year (GBP) 1-2 years (GBP) 2-3 years (GBP)
Lease payment 87,500 87,500 65,625
--------------- ---------------- ----------------
Finance charge 5,993 3,520 972
--------------- ---------------- ----------------
Net present value 81,507 83,980 64,653
--------------- ---------------- ----------------
2020
Lease liabilities included in the current
statement of financial position
GBP
Current 83,980
Non-current 64,653
148,633
2020
Amounts recognised in income statement GBP
Interest on lease liabilities adopted under
IFRS 16 5,993
5,993
The company has a lease with Sion Properties Limited, a company
controlled by A J Grant, for the rental of 78 Mount Ephraim, a
self-contained office building. The lease has an annual rental of
GBP87,500, being the market rate on an arm's length basis, and
expires on 26 September 2027. The total cash outflow for leases in
2020 was GBP87,500. There is an option to terminate the lease on 26
September 2022 and therefore this is the discounted period.
14. Investments held for trading Group Company
2020 2019 2020 2019
------------ ---------- ---------- -----------------
Listed Investments: GBP GBP GBP GBP
Valuation:
At 1 January 4,600 1,956 - -
Additions 1,060,177 758,021 - -
Disposals (1,060,594) (755,377) - -
As at 31 December 4,183 4,600 - -
============ ========== ========== =================
Listed investments held for trading are stated at their market value at
31 December 2020 and are considered to be level one assets in accordance
with IFRS 13. The group does not undertake any principal trading activity.
15. Cash and cash equivalents Group Company
2020 2019 2020 2019
------------ ---------- ---------- -----------------
GBP GBP GBP GBP
Balance at bank and in hand
- group/company 6,320,942 5,374,229 2,222,469 2,181,403
Cash held for settlement of
market transactions (2,525,962) (83,268) - -
3,794,980 5,290,961 2,222,469 2,181,403
============ ========== ========== =================
In addition to the balances shown above the group has segregated
deposit and current accounts held in accordance with the client
money rules of the Financial Conduct Authority. The group also has
segregated deposits and current accounts on behalf of
Counterparties and elected Professional clients of GBP2,111,321
(2019: GBP695,474) not governed by client money rules therefore
they are also not included in the statement of financial position
of the group. This treatment is appropriate as the business is a
going concern however, were an administrator appointed, these
balances would be considered assets of the business.
16. Share capital 2020 2019
--------- ---------
160,000 160,000
Authorised:
64,000,000 Ordinary shares of 0.25p each 160,000 160,000
--------- ---------
2020 2019
GBP GBP
At 1 January 2020 111,828 111,828
Allotted, issued and fully paid:
44,731,000 (2019: 44,731,000) Ordinary shares of 1p
each 111,828 111,828
========= =========
The company has one class of ordinary shares which carry no
right to fixed income.
On 29 October 2020 there was a capital reorganisation whereby
each of the company's issued and unissued ordinary shares of
GBP0.01 each were subdivided into 4 ordinary shares of GBP0.0025
each. The 2019 figures have been adjusted to reflect this
subdivision. Shares held in treasury are deducted for the purpose
of calculating earnings per share. During the period 98,400 shares
were sold from treasury. As at the period end 917,600 shares are
held in treasury.
17. Trade and other payables Group Company
Amounts falling due within 2020 2019 2020 2019
one year:
---------- ---------- ---------- ----------
GBP GBP GBP GBP
Trade payables 188,688 58,300 10,554 977
Settlement payables 2,997,247 1,892,926 - -
Amount owed to group undertaking - - 750,866 840,458
Other taxes and social security 174,712 155,478 - -
Other payables 566,654 561,738 - -
Accruals 248,729 515,617 39,600 50,000
---------- ---------- ---------- ----------
Trade and other payables 4,176,030 3,184,059 801,020 891,435
Lease liabilities 83,980 81,507 83,980 81,507
Income tax 602,794 449,323 350,832 357,443
Total liabilities 4,862,804 3,714,889 1,235,832 1,330,385
========== ========== ========== ==========
Settlement payables are short term payable amounts arising as a
result of settlement of trades in an agency capacity. Trade
payables and other taxes and social security are all paid at the
beginning of the month after the invoice was received or the
liability created.
18. Dividends 2020 2019
---------- ----------
GBP GBP
Interim dividends paid on Ordinary 1p shares 4,836,310 4,502,280
========== ==========
Dividend per Ordinary 1p share 11.06 10.31
========== ==========
Please refer to the directors' report for dividends declared
post year end.
19. Financial Instruments
The group's principal financial instruments comprise cash, short
terms borrowings and various items such as trade receivables, trade
payables etc. that arise directly from operations. The main purpose
of these financial instruments is the funding of the group's
trading activities. Cash and cash equivalents and trade and other
receivables are categorised as held at amortised cost, and trade
and other payables are classified as held at amortised cost. Other
than investments held for trading all financial assets and
liabilities are held at amortised cost and their carrying value
approximates to their fair value.
The main financial asset of the group is cash and cash
equivalents which is denominated in Sterling and which is detailed
in note 14. The group operates a low risk investment policy and
surplus funds are placed on deposit with at least A rated banks or
equivalent at floating interest rates.
The group also holds investments in equities, treasury shares
and property.
20. Critical accounting estimates and judgements
The group makes estimates and assumptions concerning the future.
These estimates and judgements are based on historical experience
and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. The resulting
accounting estimates will, by definition, seldom equal the related
actual results. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying
amounts of assets within the next financial year relate to
goodwill, intangible assets and bad debts.
The group tests annually whether goodwill has suffered any
impairment, in accordance with the accounting policy stated in Note
2 (e). These calculations require the use of estimates. The
assumptions and sensitivity relating to the impairment tests are
detailed in note 10.
The group considers at least annually whether there are
indications that the carrying values of intangible assets may not
be recoverable, or that the recoverable amounts may be less than
the asset's carrying value, in which case an impairment review is
performed. These calculations require the use of estimates. The
group also calculates the implied levels of variables used in the
calculations at which impairment would occur.
21. Immediate and ultimate parent undertaking
There is no immediate or ultimate controlling party.
22. Related party transactions
The company has a lease with Sion Properties Limited, a company
controlled by a director of the company, for the rental of 78 Mount
Ephraim, a self-contained office building. The lease has an annual
rental of GBP87,500, being the market rate on an arm's length
basis, and expires on 26 September 2027.
During the year Jarvis Investment Management Limited paid Jarvis
Securities Plc GBP7,000 (2019: GBP7,000) for rental of a disaster
recovery site.
Jarvis Securities plc owed Jarvis Investment Management Limited
GBP750,866 (2019: GBP751,208) at year end.
During the year, directors, key staff and other related parties
by virtue of control carried out share dealing transactions in the
normal course of business. Commissions for such transactions are
charged at various discounted rates. The impact of these
transactions does not materially or significantly affect the
financial position or performance of the company. At 31 December
2020, these same related parties had cash balances of GBP392,110
(2019: GBP1,307,212) and interest was earned during the year
amounting to GBP923 (2019: GBP2,203). In addition to cash balances
other equity assets of GBP49,950,739 (2019: GBP40,119,621) were
held by JIM Nominees Ltd as custodian.
During the year Jarvis Securities Plc charged GBP3,869,812
(2019: GBP3,844,388) to Jarvis Investment Management Limited for
use of intellectual properties.
23. Capital commitments
As of 31 December 2020, the company had no capital commitments
(2019: nil).
24. Fair value estimation
The fair value of financial instruments traded in active markets
is based on quoted market prices at the balance sheet date. The
quoted market price used for financial assets held by the company
is the current bid price. The carrying value less impairment
provision of trade receivables and payables are assumed to
approximate their fair values.
25. Financial risk management objectives and policies
The directors consider that their main risk management objective
is to monitor and mitigate the key risks to the group, which are
considered to be principally credit risk, compliance risk,
liquidity risk and operational risk. Several high-level procedures
are in place to enable all risks to be better controlled. These
include detailed profit forecasts, cash flow forecasts, monthly
management accounts and comparisons against forecast, regular
meetings of the full board of directors, and more regular senior
management meetings.
The group's main credit risk is exposure to the trading accounts
of clients. This credit risk is controlled via the use of credit
algorithms within the computer systems of the subsidiary. These
credit limits prevent the processing of trades in excess of the
available maximum permitted margin at 100% of the current portfolio
value of a client.
A further credit risk exists in respect of trade receivables.
The group's policy is to monitor trade and other receivables and
avoid significant concentrations of credit risk. Aged receivables
reports are reviewed regularly and significant items brought to the
attention of senior management.
The compliance risk of the group is controlled through the use
of robust policies, procedures, the segregation of tasks, internal
reviews and systems controls. These processes are based upon the
Rules and guidance notes of the Financial Conduct Authority and the
London Stock Exchange and are overseen by the compliance officer
together with the management team. In addition, regular compliance
performance information is prepared, reviewed and distributed to
management.
The group aims to fund its expansion plans mainly from existing
cash balances without making use of bank loans or overdraft
facilities. Financial risk is therefore mitigated by the
maintenance of positive cash balances and by the regular review of
the banks used by the group. Other risks, including operational,
reputational and legal risks are under constant review at senior
management level by the executive directors and senior managers at
their regular meetings, and by the full board at their regular
meetings.
The group derives a significant proportion of its revenue from
interest earned on client cash deposits and does not have any
borrowings. Hence, the directors do not consider the group to be
materially exposed to interest rate risk in terms of the usual
consideration of financing costs, but do note that there is a risk
to earnings. Given the current Bank of England base rate is at its
lowest level since its foundation in 1694, and the business has
remained profitable, this risk is not considered material in terms
of a threat to the long term prospects of the group.
The capital structure of the group consists of issued share
capital, reserves and retained earnings. Jarvis Investment
Management Limited has an Internal Capital Adequacy Assessment
Process ("ICAAP"), as required by the Financial Conduct Authority
("FCA") for establishing the amount of regulatory capital to be
held by that company. The ICAAP gives consideration to both current
and projected financial and capital positions. The ICAAP is updated
throughout the year to take account of any significant changes to
business plans and any unexpected issues that may occur. The ICAAP
is discussed and approved at a board meeting of the subsidiary at
least annually. Capital adequacy is monitored daily by management.
Jarvis Investment Management Limited uses the simplified approach
to Credit Risk and the standardised approach for Operational Risk
to calculate Pillar 1 requirements. Jarvis
Investment Management Limited observed the FCA's regulatory
requirements throughout the period. Information disclosure under
Pillar 3 of the Capital Requirements Directive is available from
the group's websites.
The directors do not consider that the group is materially
exposed to foreign exchange risk as the group does not run open
currency positions beyond the end of each working day.
As of 31 December 2020, trade receivables of GBP159,784 (2019:
GBP131,923) were past due and were impaired and partially provided
for. The amount of the provision was GBP131,456 as at 31 December
2020 (2019: GBP101,539). The individually impaired receivables
relate to clients who are in a loan position and who do not have
adequate stock to cover these positions. The amount of the
impairment is determined by clients' perceived willingness and
ability to pay the debt, legal judgements obtained in respect of,
charges secured on properties and payment plans in place and being
adhered to. Where debts are determined to be irrecoverable, they
are written off through the income and expenditure account. The
group does not anticipate future write offs of uncollectable
amounts will be significant as the group now imposes much more
restrictive rules on clients who utilise extended settlement
facilities.
Group Company
Provision of impairment of 2020 2019 2020 2019
receivables:
-------- --------- ----- -----
GBP GBP GBP GBP
At 1 January 101,539 105,470 - -
Charge / (credit) for the year 30,306 23,398 - -
Uncollectable amounts written
off (389) (27,329) - -
-------- --------- ----- -----
At 31 December 131,456 101,539 - -
======== ========= ===== =====
, the news service of the London Stock Exchange. RNS is approved by
the Financial Conduct Authority to act as a Primary Information
Provider in the United Kingdom. Terms and conditions relating to
the use and distribution of this information may apply. For further
information, please contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR BXGDXIUBDGBG
(END) Dow Jones Newswires
March 11, 2021 02:00 ET (07:00 GMT)
Jarvis Securities (LSE:JIM)
Historical Stock Chart
From Jun 2024 to Jul 2024
Jarvis Securities (LSE:JIM)
Historical Stock Chart
From Jul 2023 to Jul 2024
